When attempting to see through ideological smoke screens to obtain reliable data, economists have become clever in identifying so-called “natural experiments.”
Those are situations in which sudden legislative changes or breaks in market conditions permit empirical tests of hypotheses regarding human behavior. That is distinct from laboratory experiments, where one can control the environment completely, or large field experiments (http://goo.gl/W36ESt) with less control but often more explanatory power.
On a conference trip to Portugal this week, I was able to observe some of the effects of a major natural experiment conducted in that country with respect to drug legalization.
When walking the old city of Lisbon, one is approached frequently by shadowy figures whispering “hashish” or the names of other drugs for sale — all in broad daylight.
As recalled in the 2010 book “Drug Policy and the Public Good” (http://goo.gl/J19t0v), “Portugal removed the personal possession and use of all controlled drugs from the criminal law in 2001, but maintained their formal illegality as offences.”
This system offers treatment rather than punishment. Drug trafficking (involving “possession in excess of the average dose needed for 10 days of personal use”) still remains illegal.
Not surprisingly, there has been great interest in the effects that this policy change has had on the illegal market for drugs and on public health.
Economists have long argued that “wars on drugs” are costly and ineffective policy tools, driving up prices and making it more profitable for those who successfully supply consumers.
On the other side of the market, criminalizing personal use — ignoring the moral arguments for a moment, something that economic science is spectacularly unqualified to judge — also leads to increased cost for society through higher incarceration rates.
As it turns out, Portugal’s experience may foretell some of the developments one can expect from state laws legalizing marijuana, as well as indications by the justice department last week that they would let states police themselves.
Results from a 2007 study (http://goo.gl/Bl4GTX) showed fewer treatments for heroin addiction in Portugal but more for “cannabis problems.” The increase in youth usage was comparable to countries that had not legalized personal possession.
A more detailed report in 2009 by Glenn Greenwald (yes, the blogger/journalist who now tops the National Security Agency’s “enemies to track and spy on list”) published by the libertarian CATO Institute (http://goo.gl/RKEakj) found that “freeing its citizens from the fear of prosecution and imprisonment for drug usage, Portugal has dramatically improved its ability to encourage ... treatment.”
A recent working paper (“Rethinking America’s Illegal Drug Policy” — http://goo.gl/dz3P2s) states that “the current regime is unlikely to be cost-minimizing for either marijuana or cocaine.”
And George Mason University economists Peter Boettke and Chris Coyne, in a law-review article published this year (http://goo.gl/akMmz4), conclude that “ignoring the insights from economics regarding drug prohibition ... will continue to waste resources and impose significant costs, both economic and non-economic.”
So, despite all the smoke and mirrors thrown up by those who want to keep fighting a losing and extraordinarily costly “war on drugs” (most of whom profit handily from it, either politically or financially), there may be better solutions out there.
Economists have had their say. Now, it’s up to policymakers to find the courage to legalize and regulate this market that is clearly here to stay.
Dr. Michael Reksulak has taught economics and public finance in Georgia Southern University’s College of Business Administration. He can be contacted at MReksulak.SMN@gmail.com.